Saturday, December 3, 2011

Comments on Samsung's official reaction to denial of preliminary injunction

On Engadget and PCMag.com, I just read Samsung's statement on the failure of Apple's motion for a preliminary injunction in the US. While Samsung has every reason to be happy or even jubilant about this outcome, I do think that some of what it says in its official reaction may mislead some people into believing that Samsung's conduct has received full court approval. That, however, is clearly not the case.

One reasonably important thing that Samsung's statement doesn't address is that if the ruling on Apple's preliminary injunction request had been the outcome of a liability trial in a regular litigation, Samsung would owe Apple very significant damages for the infringement of a valid iPhone design patent and a valid software patent.

I believe Apple should generally focus more on solid technical patents rather than design-related and other legally soft types of intellectual property rights. Apple's design is a key success factor in the market but that doesn't make it equally valuable in litigation. The intellectual property framework generally rewards technical innovation with far more powerful exclusive rights than design innovation.

It's unfortunate for Apple that Judge Lucy Koh misassessed, as far as I can see, the relevant competitive dynamics. It appears that about half of Apple's claims would otherwise have succeeded. Even if Apple had scored a win, it wouldn't have been hard for Samsung to design around the ruling, but the outcome would then have reflected far more favorably on the merits of Apple's case.

T-Mobile's and Verizon's public interest statements weren't viewed by the judge as contributing any potentially game-changing fact. Those companies basically advocated that infringement must be allowed as long as someone else benefits from it. The judge was right to disagree with those absurd positions.

The preliminary injunction related to only a subset of all the claims Apple brought in this action. The main proceeding, with a trial scheduled to begin on July 30, will continue. There are more intellectual property rights and products at issue in the main proceeding, and the outcome can vary even with respect to the claims based on which Apple sought a preliminary injunction.

You can read my detailed position on this by clicking on the link further above. I'll now quote one sentence at a time from Samsung's statement and comment:

Like I said, a ruling wouldn't have been the end of the world for Samsung because it would have been somewhat narrow, but it would have strengthened Apple's position and made Samsung out to be a reckless infringer or, as Apple likes to call it, a "copyist".

That is not a correct way to interpret the ruling. Apple's arguments didn't have enough merit in the eyes of the judge to result in a preliminary injunction. But the only thing between Apple and a partial win affecting all four of the accused products (but not based on all of the asserted rights) was the judge's misassessment of how the market works.

"In particular, the court has recognized that Samsung has raised substantial questions about the validity of certain Apple design patents."

This is correct, but let me explain: Apple asserted two iPhone-related design patents -- a broad one and a narrower one -- and one iPad-related design patent. It furthermore asserted a software patent, and that one was deemed to withstand Samsung's challenges to its validity.

The judge indeed doubts the validity of the broad iPhone-related design patent and that of the iPad-related one, but not that of the narrower iPhone-related design patent. As far as the Galaxy Tab 10.1 is concerned, doubts about validity indeed saved the day for Samsung. With respect to the Galaxy S 4G and Infuse 4G smartphones, Samsung actually depended on something else (denial of irreparable harm).

In the main proceeding, Apple could still prove the broad iPhone design patent and the iPad design patent valid. But even if it did, the surviving part of the scope of those rights would, realistically speaking, be rather narrow.

"We are confident that we can demonstrate the distinctiveness of Samsung's mobile devices when the case goes to trial next year."

An infringement of an invalid intellectual property right doesn't matter. And even an infringement of a valid intellectual property right doesn't result in an injunction if the court doesn't believe an injunction is equitable. But as far as infringement alone is concerned, the ruling actually found Samsung to be very likely to infringe all of the asserted intellectual property rights: three design patents and one overscroll software patent.

The worst part for Samsung is a finding that "Samsung appears to have created a design that is likely to deceive an ordinary observer". That's the very opposite of the "distinctiveness" Samsung says it wants to prove.

I doubt that Apple can prevent Samsung from building products that are going to be legally above board but still very similar to Apple's products. But (unfortunately for Apple) that's not a very high standard, and certainly can't be called "distinctiveness" to use Samsung's preferred terminology.

"We will continue to assert our intellectual property rights and defend against Apple's claims to ensure our continued ability to provide innovative mobile products to consumers."

There's no doubt about Samsung's great fighting spirit, but for the reasons I outlined above and in my previous post, it's not like Apple's claims have no merit. My criticism of Apple's strategy is based on my belief that Apple should rather concentrate on the enforcement of technical patents that will give it serious leverage. It needs to identify its winning patents in its wider conflict with Android device makers. By now it should be clear that the design stuff is more of a distraction than a winning path.

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About Me

Florian Mueller is a former award-winning intellectual property activist with 25 years of software industry expertise spanning across different market segments (games, education, productivity and infrastructure software), diverse business models and a variety of technical and commercial areas of responsibility. In recent years, Florian advised a diversity of clients on the patent wars surrounding mobile devices, and on their economic and technical implications. (In order to avoid conflicts of interest, Florian does not hold or initiate transactions in any technology stocks or derivatives thereof.) He is now developing a game app for smartphones and tablet computers.